File No. 837.77/87.
The American Minister to
the Secretary of State.
No. 530.]
American Legation,
Habana
,
December 5, 1912
.
Sir: Referring to your telegraphic
instructions of December 4, I have the honor to enclose herewith copy of
a note which I have today addressed in pursuance of your instructions to
His Excellency the President of the Republic of Cuba.
I have [etc.]
[Page 389]
[Inclosure.]
The American Minister
to the President of Cuba.
No. 431.]
American Legation,
Habana
,
December 5, 1912
.
Your Excellency: In pursuance of
telegraphic instructions from my Government I have the honor to
inform Your Excellency that the Embassy of Great Britain in
Washington has called the attention of the Department of State of
the United States to the complaint made by the Cuban Central Railway
Company in relation to the proposed Caibarién-Nuevitas railroad, and
has requested that my Government make an investigation of the matter
and take such action as the facts disclosed should warrant.
In the documents submitted by the British Embassy with the complaint
it is alleged:
- First. That executive decree accepting the North Coast
Company’s proposal is illegal for the reason, among others,
that it violates rights already possessed by the Cuban
Central Company under early charters; that payment of the
subvention contrary to existing law is provided by it; that
the considerations under the terms of the law calling for
bids upon which the award was based were not within the
legal cognizance of the Executive; and that without proper
formalities awards were made for lines other than the
Caibarién-Nuevitas.
- Second. That, financially and economically, the award to
the North Coast Company was unwise and inexpedient, for the
reasons, among others, that the subvention awarded the North
Coast Railway Company was essentially higher than that asked
by the Cuban Central Railway; that without any subvention
whatsoever the Cuban Government [sic] will build the road if
given a reasonable time; that by terms of the bid and award
the road may be built with Government money by the North
Coast Railway Company and then, by withdrawal from the
public service, become a private road; that, whereas the
Cuban Central Railway is a concern successful and of
established standing, the North Coast Railway is a new
concern never before having built and operated railways; and
that technical reports made by the Inspector General of
Railroads and by the Secretary of Public Works bear out the
fact that the Cuban Central was the better project, these
reports when making the award being ignored by the
President.
- Third. That according to the best information received by
the Cuban Central, private information has been given by a
high Cuban official to the promoters of the North Coast
Railway that several millions of bonds which the North Coast
Company proposes to float will be guaranteed by the
Government of Cuba should such guaranty be necessary for
selling the bonds.
While the question of the legality or illegality of executive action
in awarding the contract does not appear to be one for my Government
at this time, the foregoing points second and third, involving as
they do the use of Government funds and the possible increase of the
Cuban Government’s obligations, are, pursuant to the policy outlined
in Mr. Gibson’s note1 addressed to Your
Excellency on August 20, 1912, concerning the Zapata Swamp
Concession, of immediate interest to my Government.
I am instructed to bring these allegations seriously to the attention
of Your Excellency, and to point out that a proper disposition to
avoid future trouble with reference to this matter would appear to
require that Your Excellency give the question renewed and most
serious consideration, in order that no action shall be taken which
will either involve the Cuban Government in future difficulties or
will constitute an improvident use of national funds and credit or
an increase of national financial obligations. While earnestly
pointing out the above considerations to Your Excellency, I desire
to avoid giving the impression that my Government is espousing
either project as against the other.
I avail [etc.]
